How Do You Prove an Insurance Company Acted in Bad Faith?

 Posted on November 14, 2025 in Personal Injury

We rely on insurance companies to pay out when an unexpected financial situation happens. For example, if you suffered injuries in a car accident or on someone’s property due to their negligence, you need fast and fair compensation. Unfortunately, too often these companies will prioritize their bottom lines. To prove bad faith, you must show that the insurer’s actions were unreasonable and that you suffered financial harm as a result. If you believe your insurer is treating you unfairly, a Fort Collins, CO bad faith litigation lawyer can help you understand your options.

What Counts as Bad Faith in Colorado?

Every insurance policy includes an implied duty of good faith and fair dealing. Under C.R.S. § 10-3-1115, an insurer may not unreasonably delay or deny payment for a valid claim. The law applies to all types of insurance, including auto, homeowners, and health coverage.

Common examples of bad faith include ignoring evidence that supports your claim, refusing to communicate, or offering a settlement far below what your policy covers. Another sign is when the insurer fails to properly investigate before deciding to deny your claim. Colorado courts have made it clear in Goodson v. American Standard Ins. Co. that insurers must act reasonably and in good faith when handling claims. If they fail to do so, you may be entitled to compensation beyond the original policy benefits.

Evidence You Can Use To Prove Your Insurance Company Is Acting in Bad Faith

To show that your insurance company acted in bad faith, you must prove its actions were unreasonable or dishonest. The following types of evidence can strengthen your case:

• Written communications: Emails, letters, or texts between you and the insurance company that show delays, ignored messages, or misleading statements

• Claim documents: Copies of your policy, claim forms, and any denial letters that show inconsistencies or unfair reasoning

• Timeline of events: Records of when you filed the claim and when the company responded or failed to respond

• Internal records: Notes from insurance adjusters or reports that may be revealed during the discovery process

• Expert testimony: Opinions from professionals who can explain what a reasonable insurer should have done under similar circumstances

Under C.R.S. § 10-3-1116, if you prove that your insurer unreasonably delayed or denied benefits, you may recover up to two times the amount of the covered benefit, plus attorney’s fees and court costs.

Steps To Take if You Suspect Bad Faith From Your Insurer

If you believe your insurance company is acting in bad faith, start by keeping records of all written communication with the insurer. If an adjuster calls you, write down the date, time, and summary of the conversation. Always ask for written explanations of any claim decisions, as this can serve as evidence that supports your case later on.

Next, avoid signing anything that releases your claim rights without understanding the full consequences. Insurance companies sometimes pressure claimants to accept quick, low settlements. It is better to have an attorney review these documents first. Your lawyer can request internal claim notes and communications that reveal whether the insurer acted unfairly.

Finally, do not face the insurance company alone. They have teams of adjusters and attorneys who know how to protect the company’s bottom line. A knowledgeable bad-faith lawyer can level the playing field and fight for you.

Schedule a Free Consultation With a Larimer County, CO Bad Faith Litigation Attorney Today

Proving bad faith takes careful documentation, persistence, and a strong legal strategy. If your insurance company is delaying, denying, or undervaluing your claim, you deserve a fair outcome.

Attorney Hoggatt, a proud member of the Colorado Trial Lawyers Association and the Workers' Compensation Education Association, is dedicated to protecting clients from unfair insurance practices. Call Hoggatt Law Office, P.C. at 970-225-2190 to schedule your free consultation with a trusted Fort Collins, CO personal injury lawyer today. Se Habla Español.